$($Related to Checkpoint $8\mathrm{.}3)($CAPM and expected returns$)$

a$.$ Given the following holding$-$period returns, $,$ compute the average returns and the standard deviations for the Sugita Corporation and for the market.

b$.$ If Sugita's beta is $1\mathrm{.}73$ and the risk$-$free rate is $6$ percent, what would be an expected return for an investor owning Sugita? $($Note: Because the preceding returns are based on monthly data, you will need to annualize the returns to make them comparable with the risk$-$free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by $12.)$

c$.$ How does Sugita's historical average return compare with the return you should expect based on the Capital Asset Pricing Model and the firm's systematic risk?

a$.$ Given the holding$-$period returns shown in the table, the average monthly return for the Sugita Corporation is $\%.($Round to three decimal places.$)$

The standard deviation for the Sugita Corporation is $\%.($Round to two decimal places.$)$

Given the holding$-$period returns shown in the table, the average monthly return for the market is $\%.($Round to three decimal places.$)$

The standard deviation for the market is $\%.($Round to two decimal places.$)$

b$.$ If Sugita's beta is $1\mathrm{.}73$ and the risk$-$free rate is $6$ percent, the expected return for an investor owning Sugita is $\%.($Round to two decimal places.$)$

The average annual historical return for Sugita is $\%.($Round to two decimal places.$)$

c$.$ How does Sugita's historical average return compare with the return you should expect based on the capital asset pricing model and the firm's systematic risk? $($Select from the drop$-$down menu.$)$

Sugita's historical average return is the return based on the capital asset pricing model and the firm's systematic risk.

Data table

$\backslash$table$[[$Month$,$Sugita Corp.,Market$],[1,2\mathrm{.}2\%,1\mathrm{.}0\%$